The financing of Small Swedish companies established in China

Abstract: This dissertation intends to describe how small Swedish companies experience the handling of financing in China. Which include describing how small Swedish companies have chosen to finance their establishment, and whether Myers Pecking order theory is applicable. Further more, to show the inquired companies attitude towards external equity, and if any problems are experienced, connected to reaching long-term external finance. The specifikation of the problem for this dissertation is, How do small Swedish companies established in China experience the handling of financing? And to answer the specification of the problem a quantitative approach has been used. The data was gathered through a survey sent out to a number of small Swedish companies established in China. The definition of small Swedish companies has been set to less than 100 employees, and furthermore, established in China under any of the entry modes WFOE, FICE, Joint Venture or Rep/Sales Office. The over all conclusions for this dissertation, are that internal finance is preferred, and in general is the use of external finance insignificant among small Swedish companies established in China. What can be concluded from this is that Myers Pecking order theory is applicable. Further more, there are strong indications that the inquired companies do not experience any financial gap, or in general any imminent problems surrounding reaching external finance. Important to add to the conclusion is that just because there are no imminent problems, does this not signify that companies do not experience any problems at all reaching external finance.